Many TGF-b (transforming growth factor)/BMP (bone morphogenetic protein) cytokines stimulate pluripotent mesenchymal cells to proliferate and differentiate into the chondrocytes and osteoblasts that elaborate cartilage and bone. Recombinant human BMPs (rhBMPs) are used in orthopedic surgery, but they are expensive, water-soluble, and exhibit short retention times. Cortical bone contains the tiny amount of BMP required to initiate fracture healing, but the amount of rhBMP required to induce bone formation is much greater. Wozney, et al., postulated that demineralized bone matrix (DBM) contains something that contributes slow release/immobilization characteristics to BMP, thus reducing the amount of BMP needed to stimulate osteogenesis. DBM contains secreted phosphoprotein-24 kDa (spp24), a proteolytically-labile protein that contains both mineral- and TGF-b/BMP cytokine-binding domains, which may account for slow release. FL (full-length)-spp24 and its degradation products (i.e., spp18.1, spp16, and spp14.5) bind BMP-2 and -7. Only FL-spp24 (but not its truncated derivatives) binds TGF-b2, suggesting that spp24 proteolysis results in products that differentially bind BMP and TGF-b. Differential binding could modulate the relative availability of TGF-bs vs. BMPs and may contribute to the regulation of bone metabolism. FL-spp24 contains 2 BMP-binding domains (the TRH1 or TGF-b receptor II homology-1 domain and a novel C-terminal domain), but spp24 degradation products contain only 1 BMP-binding domain (the TRH1 domain), which may account for the difference in BMP and TGF-b binding. The Cys1-to- Cys19 disulfide-bonded synthetic peptide corresponding to the TRH1 domain of spp24 is called cyclic BMP binding peptide (cBBP). cBBP increases the tissue retention of BMP-2 and stimulates BMP-2 and BMP-7- mediated spinal fusion and BMP-2-mediated long bone healing. In theory, the BMP-binding properties of cBBP make it an ideal candidate for a BMP carrier in SBGS (synthetic bone graft substitutes). The long-term objectives of our research are to: (1) determine the roles of spp24 and its degradation products in the regulation of TGF-b cytokine superfamily activity in bone, and (2) design improved cBBP derivatives for use in SBGS. We will test hypotheses that: (a) FL-spp24 binding to TGF-bs inhibits the interaction between TGF-bs and their receptors and attenuates down-stream, post-receptor Smad- dependent and -independent signaling and gene regulation, and (b) chemical modifications of cBBP that decrease its KD (increase its affinity) for BMP or increase the negative charge on cBBP to permit it to bind the positively-charged BMPs more effectively will promote BMP retention and enhance cytokine bioactivity in SBGS. In Specific Aim 1, we will determine the effects of C-terminal degradation of spp24 on the kinetics of its binding to TGF-bs by SPR (surface plasmon resonance) and competitive receptor binding assay. In Specific Aim 2, we will determine the effects of spp24 degradation on TGF-b signal transduction mediated by Smad-dependent pathways, assessed as R-Smad phosphorylation and nuclear translocation. In Specific Aim 3, we will determine the effects of spp24 degradation on Smad-independent MAPK, JNK, ERK and p38 kinase pathways in TGF-b-treated cells, based on quantitative analysis of phospho-specific antibody arrays. The results will be validated by qPCR of TGF-b-mediated gene expression. In Specific Aim 4, we will determine the effects of spp24 degradation on TGF-b-induced intramembranous bone formation and chondrogenesis by quantitative histology and immunohistology of types I and II collagen and osteocalcin. In Specific Aim 5, we will synthesize cBBP derivatives with decreased KDs (increased affinities) for BMPs or which are chemically phosphorylated to increase their BMP-binding capacity. Their binding to BMPs will be assessed by SPR, and their effects on BMP-2 and -7 bioactivity will be determined in the ectopic bone forming bioassay, with confirmation in a rodent model of bone healing, such as spinal fusion.